The Canadian Securities Regulators (CSA) has recently proposed rules to increase firm disclosure regarding performance reporting to their retail clients. Although these changes would be a step in the right direction, I don’t see this as a huge win for Canadian investors, for a number of reasons:
For those Canadian investors who are not provided with a regular assessment of their portfolio’s performance, there is still hope. With a little patience (and PWL’s help), you can calculate your very own portfolio rate of return (using the Modified Dietz Method).
Your mission…should you choose to accept it
Step 1: Calculate your total month-end portfolio value, starting with December 2011.
Step 2: List all 2012 cash flows into (+) and out of (-) the portfolio for each month. Include the day of the month beside each transaction.
The year-to-date (YTD) return of 7.66% is shown in the bottom left-hand corner of the spreadsheet. As the year goes on, investors can continue to update the spreadsheet until they have one full year worth of data.
Even if your firm is lagging behind in terms of performance reporting, you now have the tools necessary to do this yourself. Please feel free to email me with any questions you may have regarding calculating your portfolio’s rate of return: firstname.lastname@example.org
Additional tips for U.S. dollar accounts
Special thanks to Michael Simioni, Chief Compliance Officer (CCO), PWL Capital Inc., and Raymond Kerzerho, Director of Research, PWL Capital Inc., for their comments and insights.